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The taxpayer Redevco was a member of a fashion chain founded in the Netherlands. It was incorporated in the UK in November 2004. In January 2008 Redevco moved its place of effective management to the Netherlands and became non-resident in the UK for tax purposes.
As a result it was deemed under TCGA 1992 s 185 to have disposed of its assets and re-acquired them at market value giving rise to a taxable gain of £139m. It was also considered to have assigned the assets and liabilities that represented its loan relationships for a sum equal to their fair value and immediately re-acquired them for the same amount (FA 1996 Sch 9 para 10A). This gave rise to profits for corporation tax purposes of £2.7m.
It was not disputed that at the time of Redevco’s migration these exit charge provisions...
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